eCommerce pricing can be tricky - which is why understanding pricing strategy is so important for online merchants!

Knowing how to price your products effectively can give you an edge over your competitors, boost your profit margins and increase sales. Though eCommerce pricing sounds complex, knowing which pricing strategies to use in particular situations can give your online business a key advantage over the competition.

Here’s a closer look at what exactly pricing strategy is and 10 eCommerce pricing strategies to keep in mind!

What is a Pricing Strategy in Marketing?

Pricing strategy is the method used by businesses to properly price their products and services. Prices are mostly determined by customer base, competition, cost of production, labor and advertising. Some percentage is then added to serve as the profit from the sales of the product or service.

Without basing your product pricing on a viable strategy, you’ll likely end up overpricing or underpricing, hurting your bottom line. If you price too low, you’ll begin to lose money as your profit margin diminishes. On the other hand, if your prices are too high, you’ll start losing customers as they’ll turn to your competitors.

10 eCommerce Pricing Strategies to Keep in Mind

Apart from taking some time to compare your current eCommerce prices to those of your competitors, there are many other strategies that can be used to price your products and services in order to maintain a profitable and sustainable business in the long term. These strategies include:

1. Consumer-Oriented Pricing

This pricing strategy revolves around better understanding your customers before setting the prices for your products and services. The prices you set are based on the estimated or perceived value the customer stands to gain from using your product or service. Before adopting this particular pricing strategy, you should first understand your customer base by conducting thorough market research.


  • Enhances customer loyalty
  • Increases brand recognition
  • Maximized profit margins
  • Builds customer trust


  • Takes time to determine
  • Not suitable for every customer
  • Might lose market share to competitors with lower pricing

2. Discount Pricing

Statistics have shown that customers, not surprisingly, love deals, discounts and special offers. With this pricing strategy, you can potentially boost sales as you offer customers your products and services at discounted rates.

According to a study by Software Advice, a whopping 97 percent of retailers admit using discount as their top pricing strategy!


  • Increased traffic to online store
  • Increased sales of old and out-of-season products
  • Influx of price-conscious customers
  • Increased customer loyalty


  • Reduced profit margins
  • Might make high quality products look cheap
  • Hinders raising of prices of products in the future

3. Premium Pricing

At the other end of the eCommerce pricing strategy spectrum from discount pricing is premium pricing. This strategy entails pricing your products and services above what your competitors are offering consumers.

This tends to give your products and services a more exclusive and luxurious branding that can appeal to shoppers seeking premium-quality products. Though somewhat counterintuitive, placing a premium on your products can actually attract more shoppers in some cases!


  • Makes your products more exclusive
  • Gives your brand a luxurious feel
  • Exposes your business to more high-end consumers


  • May not appeal to price-conscious audience
  • Might lose market share if your customers get the same quality at cheaper prices elsewhere

4. Cost-Based Pricing

With this eCommerce pricing strategy, you fix a percentage of the total cost of your product into the pricing to determine the selling price. Depending on your audience, you can add between 20 to 100 percent of the total cost to a product’s price.


  • Simple to implement
  • Requires no market research
  • Increased chances of minimum returns on products sold
  • Minimal chances of losing sales


  • Reduced profit margins when priced too low
  • Target customers might react differently

5. Market-Oriented Pricing

With this particular eCommerce pricing strategy, you price your products and services based on the prevailing market conditions, especially as it relates to your competitors.

In doing this, take your time to compare the prices of your products with what is being offered in the market. Ultimately, this pricing strategy can help you to stay ahead of the competition, as you can offer prices that consistently beat theirs.


  • Minimizes negative price competition
  • Keeps your business ahead of the competition
  • Can be seamlessly combined with other pricing strategies, like cost-based pricing
  • Highly efficient


  • Implementation is not easy for smaller businesses
  • Requires more resources to implement
  • Relies mainly on assumed prices as you compare the eCommerce prices of your competitors to your own

6. Psychological Pricing

With this strategy, you try to emotionally connect with your customers instead of being entirely rational with them. For example, for a product that would have been sold for $20, you can price it at $19.95.

These slight changes can significantly impact a consumers’ buying behavior, as they may be compelled to buy a product perceived as being cheaper at first glance.


  • Triggers impulsive buys
  • Increases sales
  • Improves traffic


  • Diminishes profit margins slightly
  • Not suitable and somewhat risky for luxury brands

7. Bundle Pricing

Also known as multiple pricing, this is a method of eCommerce pricing that retailers use to sell multiple products at once.

This pricing strategy typically works best for online merchants who sell food or clothes. With this strategy, you’re able to sell multiple products for a single price. For example, you can pair a sweatshirt, pants and scarf and sell them as a bundle.


  • Creates higher value for lower-cost products
  • Increased sales of out-of-season and old stock
  • Improved traffic to online store


  • Diminished profit margins
  • Difficulty in selling the products individually in the future

8. Anchor Pricing

With this strategy, the retailer lists the original price of a product side-by-side with the current discounted price. This way, the consumer is reminded of how much they'll be saving by purchasing the advertised product.


  • Increases sales
  • Increases number of impulsive buys
  • An opportunity to sell off old inventory


  • Diminishes profit margins
  • Increases competition

9. Comparative Pricing

This eCommerce pricing strategy entails a comparison of premium and standard products and services side by side. For example, you can increase the chances of selling a $500 watch when you place it beside another watch worth $1,500. Psychologically, this method tends to make the former item seem like a huge bargain, prompting the shopper to buy it quickly.


  • Increases sales
  • Drives more traffic
  • Creates more sense of bargain for products


  • Decreases demand for products with higher value
  • Profit margin potentially is lower as fewer premium products are sold

10. Competitive Pricing

Finally, this eCommerce pricing strategy entails using a competitor’s pricing data as a benchmark in pricing your own products. With this method, you can choose to price your products at par or below the prices offered by the competition.


  • Improved sales
  • Increased traffic
  • Wider target audience
  • Simple way to keep tabs on competition


  • Diminishing profit margins
  • Difficulty in successfully raising prices of products in the future

eCommerce Pricing: Use the Strategy That Best Suits Your Business

These are just a few of the methods you can use in assigning prices to your products or services. The eCommerce pricing strategy you adopt should be mostly determined by the size of your business and the type of products or services you offer.

Ultimately, there is no best eCommerce pricing strategy that’s set in stone. Experiment with different ones to see which works best for your own business!